Bernanke’s successor backs stimulus

WASHINGTON — Federal Reserve Chair Janet Yellen sought Tuesday to reassure investors that she will embrace the low-interest-rate policy that her predecessor, Ben Bernanke, pursued before he stepped down as chairman last month.

If the economy keeps improving, Yellen told Congress, the Fed will take “further measured steps” to reduce some of the monetary stimulus it’s providing through bond purchases.

Her message of continuity at the Fed was a reassuring one for investors and contributed to a rally on Wall Street. The Dow Jones industrial average was up more than 200 points in late-afternoon trading.

In her first public comments since taking over the top Fed job last week, Yellen said she expects a “great deal of continuity” with Bernanke.

She signaled that she supports his view that the economy is strengthening enough to withstand a pullback in some stimulus but that rates should stay low to further improve a still-lackluster economy.

Yellen’s remarks to a House committee suggested that the Fed will keep its key short-term rate near zero for a prolonged period.

“The recovery in the labor market is far from complete,” Yellen said, an indication the Fed is in no hurry to boost rates.